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Why Is The Swiss Franc Rising?

In a previous article on January 30, I made the case that there was virtually no chance for a sustained appreciation in the Swiss franc through 2015. Citing a significant chance of recession in Switzerland, selling of long CHF positions by major hedge funds, and a vulnerable export market creating low incentive for the Swiss National Bank to promote CHF strength, I did not see any significant possibility that the franc would appreciate substantially. However, the CHF seems to be back in play this month, with the currency appreciating against the euro, Japanese yen and U.S. dollar:

However, it still remains that the CHF serves as a "safe haven" during periods of risk aversion in the market. Indeed, there are a number of factors that appear to be contributing to the CHF's appreciation as investors conduct a "flight to safety": Read more